Don’t discount BSE. BSE got walloped by NSE in the equity segment, but they hired Ashish Chauhan, who was the architect of the derivatives segment at NSE. Since then, BSE has become a market leader in currency derivatives despite the fact that BSE entered the segment only in 2013-14. Further, they are a significant player in interest rate derivatives and are inching towards the NSE majority share there too. BSE in the last 5-6 years has laid a major emphasis on technology and in the newer segments it is doing very well. The BSE Star MF platform accounts for more than half of all mutual fund inflows today, again, despite starting the platform a short while ago. Though I agree MCX is more than dominant in commodities, both NSE and BSE have a vast network with brokers that can be effectively utilized to gain market share. BSE also has a commodity repository jointly held by CDSL, BSE and MCX (52:24:24 proportion).
In my view, it would make sense for MCX and BSE to merge eventually, since NCDEX is already promoted by NSE. Like the telecom sector, there’s going to be a dearth of exchanges suddenly and then there may be consolidation. It does not really make sense for MCX to try and built up an equities or debt platform and try to gain market share. It is a liquidity game and MCX has no calling card for equities or debt. Currency derivatives is a fast growing segment but then again, there’s not much money there at the moment. A BSE-MCX combine would make fantastic sense.